Cold and wet weather has delayed planting across much of the U.S. Despite the weather, farmers are confident the delay will not affect the corn crop for 2014.

The USDA Crop Progress Report released today estimated 19% of corn acres are planted across the U.S., a 13% increase from the prior week. Farmers are well ahead of where they were at this point last year, quelling some fears of another disastrous planting season. The current report is still behind the five-year average for this time of year of 28%, and the USDA report fell short of expected estimates for today’s report, which were between 20% to 25%.

Corn emergence was high, considering the low planting levels that have been reported for the past few weeks. USDA reported that 3% of the total U.S. corn crop has emerged, 1% above reported levels last year, but 3% below the four-year average.

Soybean acres planted were reported for the first time this year. Estimates are much more positive than those of corn, reporting 3% of soybeans acres planted, only 1% behind the five-year average. With more time to get soybeans planted, this is a positive outlook for a planting season that has been poor thus far.

Winter wheat conditions reported are in line with numbers reported at this time the previous year. Planted spring wheat reports are low, with 18% of expected acres planted, 12% behind the five-year average.

Corn, $5.13 per bushel, and wheat, $7.08 per bushel, both traded 5% higher from the past week, while soybeans, $14.98 per bushel, traded less than 1% lower. Corn traded higher because of poor weather reports and concerns that the crop will be hindered by delayed planting. Wheat traded higher because of continued tension in Eastern Europe between Ukraine and Russia causing concern over logistical issues for the Black Sea ports.

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The rural economy has been growing for two straight months after falling below growth neutral in February. Uncertainty over when the Federal Reserve will increase interest rates has attributed to the decline of farmland values and equipment sales, which declined to their lowest levels since 2009.

The Rural Mainstreet Index (RMI), ranging between 0 and 100 with 50.0 representing growth neutral, increased to 53.2 from a 50.1 in March. After falling below growth neutral in February, the RMI has recovered well increasing 4.8 points, raising the index above growth neutral and back to levels seen in early 2013.

Ernie Goss, an economist at Creighton University stated, "The overall index for the Rural Mainstreet Economy indicates that the areas of the nation highly dependent on agriculture and energy are experiencing much slower growth than for the same period in 2013. However, recent boosts to agriculture commodity prices should boost the economy in the months ahead."

The farmland price index increased to 42.9 from 40.9. This is the first increase since November 2013, stemming four months of decline. Goss was less than positive about the outlook stating, "This is the fifth straight month that the farmland and ranchland-price index has moved below growth neutral. With the Federal Reserve continuing to withdraw its economic stimulus, I expect rising interest rates to put even more downward pressures on farmland prices and cash rents." Goss continues to suggest that the tapering of the economic stimulus is the main reason for the shrinking farmland price index, despite the above average land prices being paid at farmland auctions across much of the Corn Belt for the past several months.

The farm equipment sales index also rose for the first time since November 2013 increasing to 36.7 from 29.3. Goss said, "Agriculture equipment and implement dealers in the agriculture based areas are experiencing very weak sales to farmers in the region even as farm equipment manufacturers are experiencing positive growth due to healthy sales abroad."

Bankers were asked what the biggest challenge facing farmer’s for this year’s planting season as well as the expected breakeven price for farmers planting corn this year. Of the challenges suggested by bankers, four garnered over 95% of the vote, these included: low agricultural prices, lack of adequate moisture, high input prices, and high cash rents. The average break-even price given by rural bank CEO’s was $4.30 down $0.54 from the 2013 estimate. Over 65% of bankers are confident the break-even price will be below $4.50.

Survey

This survey represents an early snapshot of the economy of rural, agricultural and energy-dependent portions of the nation. The RMI is a unique index covering 10 regional states, focusing on approximately 200 rural communities with an average population of 1,300. It gives the most current real-time analysis of the rural economy.

Wheat sales rebounded from a marketing year low on the news that civil unrest in Ukraine has split the country. Reports explain that pro-Russian Ukrainians have taken control of several eastern cities, prompting a military response from the Ukrainian government. Global diplomats are fearing Ukraine may fall into a civil war, which would heavily disrupt the production and exportation of their crops, affecting global supply.

Soybean sales continue to decline but total commitments this year have exceeded the USDA's projections. The USDA Crop Progress report released Monday estimated that roughly 3% of corn acres had been planted thus far. That is a 1% increase from the same time last year, but a 3% decrease from the four year average.

Weekly U.S. net corn sales for the week ending April 10rd in the 2013/2014 marketing year were 601,900 metrics tons (MT), a 9% decrease from the previous week and a 43% decrease from the prior 10-week average. Increases were reported from Japan, Israel, South Korea, Taiwan, Costa Rica, Mexico, and Saudi Arabia. Decreases were reported from unknown destinations and China. Exports were 1,111,000 MT, a 9% decrease from the prior week, but a 10% increase from the prior 10-week average. The primary destinations were Japan, Mexico, Colombia, Egypt, Saudi Arabia, Taiwan, and Venezuela.

Weekly net soybean sales were 19,200 MT, a 76% increase from the previous week, but a 92% decrease from the prior 10-week average. Increases were reported from Indonesia, Japan, Taiwan, Egypt, and Mexico. Decreases were reported from unknown destinations, China, and Turkey. Exports were 339,200 MT, a 52% decrease from the prior week and 70% decrease from the prior 10-week average. Primary destinations were Indonesia, China, Egypt, Mexico, Japan, and Taiwan.

Weekly net wheat sales were 438,000 MT, a 948% increase from the previous week and a 3% increase from the prior 10-week average. Increases were reported from Brazil Peru, Egypt, Mexico, Malaysia, unknown destinations, and Japan. Decreases were reported from Nigeria. Exports were 556,300 MT, a 0.5% increase from the prior week and an 18% increase from the prior 10-week average. Primary destinations were Japan, Mexico, Egypt, Brazil, the Philippines, and Malaysia.

U.S. wheat sales declined sharply reaching a marketing year low and have declined nine out of the last ten weeks. Wheat exports increased slightly from the past week. Corn sales and export levels declined, but reported levels are well above those seen in 2013 and 2012.

Soybean sales increased slightly and have been on the rebound following the marketing year low reported for the week ending March 20th. Soybean exports increased for only the third time in the past ten weeks, but they have been well above levels for this time in previous years. Over 40 million metric tons of soybeans have been exported thus far in the 2013/2014 marketing year, a 22% increase from this time last year.

Weekly U.S. net corn sales for the week ending April 3rd in the 2013/2014 marketing year were 658,700 metrics tons (MT), a 31% decrease from the previous week and a 43% decrease from the prior 10-week average. Increases were reported from South Korea, Japan, Colombia, Israel, Guatemala, Costa Rica, and Egypt. Decreases were reported from unknown destinations, China, and Brazil. Exports were 1,217,400 MT, a 15% decrease from the prior week, but a 23% increase from the prior 10-week average. The primary destinations were Japan, Egypt, Mexico, South Korea, Colombia, Taiwan, and Venezuela.

Weekly net soybean sales were 79,100 MT, a 19% increase from the previous week, but a 72% decrease from the prior 10-week average. Increases were reported from Mexico, South Korea, Taiwan, Japan, and Indonesia. Decreases were reported from unknown destinations. Exports were 700,400 MT, a 6% increase from the prior week and 45% decrease from the prior 10-week average. Primary destinations were China, Japan, Mexico, Egypt, Indonesia, and South Korea.

Weekly net wheat sales were 41,800 MT, an 88% decrease from the previous week and a 92% decrease from the prior 10-week average. Increases were reported from the Philippines, Mexico, Peru, Algeria, Brazil, Guatemala, and Indonesia. Decreases were reported from unknown destinations and Vietnam. Exports were 553,600 MT, a 6% decrease from the prior week and a 20% increase from the prior 10-week average. Primary destinations were Nigeria, Peru, Mexico, Thailand, The Philippines, and Guatemala.

The acceleration of U.S. soybean exports has put pressure on an already depleted stocks situation. The 2014 soybean stocks-to-use ratio has dropped from 4.4% in March to 4.0% this month. The estimated record Brazilian soybean crop was expected to take pressure off the U.S., but the drought that has plagued South America decreased production estimates for the largest soybean producer in the world. A supply relief is expected later in the year due to the increase in U.S. soybean planted acres reported in the March Prospective Plantings Report.

An interesting corn demand story has begun to develop as domestic feed use for the first half of the year is already 73% of the estimated total of 5.300 billion bushels. This is in line with the past three years, but recall that the summers of 2011 and 2012 experienced rising corn prices and tight supplies, and 2013 experienced unpredictable supply availability. In short, corn availability during the second half of the year was minimal during the last three years. If corn has a more steady availability through the summer months, usage should become more stable and increase above the projected 5.300 billion bushels.

Corn

U.S. corn ending stocks for the 2013/14 marketing year were projected 125 million bushels lower to 1.331 billion bushels, due primarily to increased export demand. Exports for U.S. corn in the 2013/14 marketing year were increased by 125 million bushels to 1.750 billion bushels. The season-average farm price for corn was raised 10 cents at the midpoint and the projected range was narrowed to $4.40 to $4.80 per bushel.

World corn production was increased by 6.4 million tons due to increases for Brazil, South Africa, and Russia.

Soybeans

U.S. Soybean exports for 2013/14 were estimated at 1.580 billion bushels, up 50 million bushels from last month reflecting the record pace of shipments and sales since the beginning of the year. Exports to China have already surpassed last year's marketing year record. Imports are expected to be a record 65 million bushels due to large expected shipments from South America in the second half of the marketing year.

Projected ending stocks for 2013/14 soybeans were lowered 10 million bushels to 135 million bushels and the stock-to-use ratio was 4.0%, compared to 4.5% last month. The 2013/14 season-average price range was raised 5 cents at the midpoint to $12.50 to $13.50.

Soybean production in Brazil was lowered to 87.5 million tons from 88.5 million tons, due to the drought affecting South America.

Wheat

U.S. wheat ending stocks for 2013/14 were increased by 25 million bushels to 583 million. The ending stocks increase was attributed mainly to a reduction in feed and residual use. The season-average farm price for all wheat was unchanged at $6.75 to $6.95 per bushel.

Outlook

Ending stocks were the highlight of this report as stocks dropped for both corn and soybeans, although the decreases were at the lower end of analysts estimated range. Global demand for U.S. corn and soybeans continues to grow and we will be tracking the export market in the second half of the year.

The coldest winter in over 30 years could keep farmers sidelined through the beginning of the planting season as cold and wet soil does not present optimal growing conditions for row crops. Final decisions will be made in the coming months on the crop to be planted and we will keep a keen eye on the corn to soybean planted ratio.

- Colvin

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Corn exports increased to the second highest level of the 2013/2014 marketing year. Soybeans exports continued to decline consistent with the trend seen over the past month. The quarterly Grain Stocks report released Monday showed domestic stocks of soybean and wheat down in comparison to 2013, while corn stocks were reportedly up 30%. The USDA Prospective Planting report was also released Monday. The report showed a large shift to soybean planted acres, a move that had been speculated by most analysts.

Weekly U.S. net corn sales for the week ending March 27th in the 2013/2014 marketing year were 960,600 metrics tons (MT), a 32% decrease from the previous week and a 16% decrease from the prior 10-week average. Increases were reported from Japan, South Korea, Egypt, Guatemala, Colombia, Taiwan, Saudi Arabia, and Mexico. Decreases were reported from China, Honduras and Nicaragua. Exports were 1,425,700 MT, a 16% increase from the prior week and a 54% increase from the prior 10-week average. The primary destinations were Japan, Egypt, Mexico, Colombia, South Korea, Taiwan, and Saudi Arabia.

Weekly net soybean sales were 66,200 MT, a 456% increase from the previous week, but an 81% decrease from the prior 10-week average. Increases were reported from Mexico Malaysia, Japan, and Indonesia. Decreases were reported from Unknown Destinations. Exports were 659,400 MT, an 8% decrease from the prior week and 52% decrease from the prior 10-week average. Primary destinations were China, Mexico, Turkey, Indonesia, and Malaysia.

Weekly net wheat sales were 336,400 MT, a 16% decrease from the previous week and a 34% decrease from the prior 10-week average. Increases were reported from Indonesia, Egypt, Nigeria, Brazil, and Unknown destinations. Decreases were reported from Guatemala. Exports were 523,100 MT, a 1% decrease from the prior week, but a 16% increase from the prior 10-week average. Primary destinations were Japan, Mexico, Indonesia, Egypt, South Korea, and Nigeria.

Source: USDA Foreign Agricultural Service

Source: USDA Foreign Agricultural Service

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